Pensions shortfall halved in 2003

09 January 2004
A new survey suggests that the “pensions black hole” - the funding gap between funds' assets and liabilities - halved during 2003, thanks to the rising stock market.

The study, conducted by Hewitt Bacon and Woodrow, claims that the funding shortfall of British pension funds fell from £100 billion to £50 billion last year.

Furthermore, the company argues that if the FTSE index rises above 5000 points, the black hole will be wiped out altogether.

Nonetheless, Hewitt Bacon and Woodrow has warned that the future remains uncertain.

Speaking to BBC Radio Four's “Today” programme this morning, Raj Moody, principal consultant at Hewitt Bacon and Woodrow, warned that demographic shifts - people living longer - will maintain the pressure on existing company pension schemes.

“The long-term problems haven't gone away”, Mr Moody warned, suggesting that people may need to work for longer in order to secure their economic futures.